I answer the biggest questions about Hamilton County’s tax reassessment.
If you live in Hamilton County, you may have heard that we will be getting our tax assessments done every four years. Hamilton County is going to revalue all residential real estate for tax purposes. You may have already received your notice in the mail. Lately, I get the question, if my assessment went up by approximately 20%, does that mean that my property taxes are going up that much? That’s not necessarily the case. In fact, it may go down because the average that we have experienced over four years is more than 20%. There are five components to how it’s calculated.
First, you have the allocation of funds for the State of Tennessee, for each county, and municipality. Then you have a tax appraisal. You can think of this as the market value of your home. Take that and multiply it by 25%, and you’ll have the assessed value - in Tennessee, it’s a 25% ratio. Then you have a certified tax rate. It’s the rate at which you are taxed for every $100 worth of property. For instance, in Hamilton County, it’s 2.7652. Finally, that number times your assessed value will equate to what you get on your tax bill.
If all of the properties in Hamilton County went up by 25%, the rate is going to go down by 25% because we have to be revenue-neutral. In other words, the state, county, or municipality cannot collect any more dollars than they did last year. It’s a redistribution of the taxes if you will.
In Hamilton County, however, it is not done across the board for the whole county. It’s done by neighborhood or subdivision. If you live in a subdivision where the rate has been increasing a lot higher than the average, chances are, your taxes may go up a bit. However, if you’re in a neighborhood whose average has increased less than whatever the average is for the county, chances are, your taxes may even go down.
You can appeal if you’re not happy with the tax assessment you get. You will have to provide some evidence, but you can go to the county about it. Sometime this summer we’ll know what our rate is going to be, and that will be applied to the tax bills that we get in October.
New construction will work a little bit differently. With new construction, you aren’t going to get away with four year’s worth of paying taxes on a vacant piece of property. If you buy a home that’s been newly constructed, the county will go and assess it during the first year. If it can find comparable homes, they’ll come up with a new figure for that assessed value. If they can’t, they’ll just use whatever it’s sold for.
Please call me if you have any real estate questions. You can reach me at 423-774-2965. Have a great day.